Can A Private Employee Challenge Appraisal Discrimination In Court? Here’s What Law Says

Every once in a while, most of us feel that we are not being paid enough for the work we do. For employees in the government sector, the process is relatively structured because salary hikes and appraisals are governed by fixed rules and regulations. However, private sector employees often have to struggle for salary increments, and in many cases, appraisal distribution may be influenced by discrimination based on gender, religion, or caste.

Such discrimination in the private sector makes it important for employees to understand the legal protections available to them. Although there is no specific law exclusively protecting private sector employees from appraisal discrimination, Malak Bhatt, Chamber Head at Chambers of Malak Bhatt, explained to ET Wealth Online the legal provisions that may apply in such situations:

•Articles 14 and 15 of the Constitution of India: These provisions guarantee equality before the law and prohibit discrimination based on religion, race, caste, sex, and place of birth. However, these protections mainly apply when discrimination is carried out by the State or a government body. Most discrimination cases are therefore filed against the government, while claims against private employers remain relatively uncommon.

•Code on Wages, 2019: This law prohibits wage discrimination based on gender. Under the Equal Remuneration Act, employees performing the same or similar work must receive equal pay regardless of gender. However, it does not specifically address performance-based appraisal discrimination that is unrelated to gender.

•Industrial Disputes Act, 1947: The Act deals with "unfair labour practices," including victimisation and discriminatory treatment of similarly placed workers.

•Constitutional principle of 'Equal Pay for Equal Work': In Randhir Singh v. Union of India (1982) 1 SCC 618, the Supreme Court recognised the principle of equal pay in both the public and private sectors. Courts have since reiterated this principle, mainly in cases where employees doing identical work receive unequal pay, rather than in disputes involving merit-based appraisals.

Despite these legal provisions, courts generally do not intervene in appraisal-related discrimination cases unless certain conditions are clearly established. Bhatt explained that discrimination claims become stronger when:

•The unequal treatment is linked to a protected characteristic such as gender, caste, religion, or disability.
•Employees in similar roles with comparable qualifications and responsibilities are consistently treated more favourably.
•The employer's internal policies clearly promise increments linked to performance criteria, but those criteria are selectively applied.

Bhatt further noted that employees face a difficult challenge in proving appraisal discrimination unless they can establish:

•A comparator: Another employee in an identical or nearly identical role received better recognition or increments despite the claimant delivering equal or superior performance.
•A protected ground: The differential treatment was based on gender, caste, religion, or disability.
•Documentary evidence: Performance reviews, emails, work records, or manager communications acknowledging the employee's contributions but denying corresponding rewards.

According to Bhatt, courts are more likely to consider such cases when the discrimination is linked to factors like gender, caste, religion, or disability, or when it falls under unfair labour practices mentioned in the Industrial Disputes Act. However, if the issue is simply favouritism in performance appraisals without any discriminatory reason, courts usually avoid interfering in an employer's appraisal decisions. At the same time, employers must be able to explain any differences in salaries or increments. These differences should be based on valid reasons such as qualifications, experience, or job responsibilities, and not on gender or any other form of discrimination.